passwella.
Menu

WAEC Financial Accounting 2021 Question 13

Question 13

Interpretation of Accounts

Use the following information to answer questions 13 and 14.
Sales for the year: Le 450,000
Purchases for the year: Le 230,000
Opening stock: Le 60,000
Closing stock: Le 40,000
The stock turnover period is

  1. A.88 days.
  2. B.73 days.
  3. C.58 days.
  4. D.41 days.
Show the answer and explanation

Answer: B (73 days.)

Explanation

Cost of sales = 60,000 + 230,000 − 40,000 = 250,000; average stock 50,000; 50,000 ÷ 250,000 × 365 = 73 days.